Unsustainability

Sustainability can be thought of as representation of intergenerational equity.

That is, later generations should receive adequate resources and opportunities to enjoy the same standard of living as generations before.

In 1987, the Brundtland Commission (part of the United Nations) defined sustainable development as:

development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Unsustainability might be categorised as a market failure, to the extent that markets may not adequately protect future generations.

Sustainability is a global public good, in that it is neither excludable nor rivalrous.

That is, no-one should be excluded from the benefits of sustainability, and one party’s enjoyment of a sustainable society should not prevent anyone else’s.

Therefore, individual countries have tried to come together to address unsustainability, with the United Nations at the centre of these efforts. However, the UN is not a world government, and cannot impose laws unless countries agree to them. Additionally, the benefits of achieving sustainability are not reflected in related market prices.

This means that efforts towards sustainability are susceptible to the free-rider problem, where those who benefit from the good do not pay, or underpay, in the hopes that someone else will (Gans, J. et al, 2018).

Research

The free-rider problem also affects common resources and public goods at a smaller scale. The market tends not to provide these goods because it can’t make the users pay.

Consider a national park that has entry by donation. Everyone can benefit from the park, but only some visitors may contribute to its upkeep, while others enjoy it without paying.

Investigate the free-rider problem some more and try to find another example. Share it in the comments. Do you have any suggestions to mitigate it?

References

_{Brundtland Commission. (1987). Brundtland Report (Our Common Future). Wikisource.}

_{Gans, J., King, S., Stonecash, R., Byford, M., Libich, J., & Mankiw, N. G. (2018). Principles of Economics (7th Asia-Pacific edition.). Cengage Learning Australia.}